SPEAKER_01 0:00

Yo yo. What's up, boy?

SPEAKER_00 0:02

What's up, man? How are you, dude? Welcome back. It's been a fuck man. I think it's been like a year. It's the last time you were on.

SPEAKER_01 0:07

Yeah. Yeah, I feel like I feel like the last one we did was was quite negative on crypto. It was. So hopefully this one's a little more optimistic.

SPEAKER_00 0:15

Hopefully we can spin it a little. I I hate to do this to you at the beginning, but just you could go super quick. Um I know you have a hard stop. Give us like a quick intro into uh who you are and what you've been doing for the last year.

SPEAKER_01 0:27

Yeah, sure. Um first of all, thanks for having me. I don't think I've done a podcast in like nine months or so. It was time, man. It was time. I feel like uh I'm not quite qualified to get on and start yapping about equities and commodities, which I've been focused on for the last year or so. Yeah, good to be on. Um yeah, I I started getting into markets, I would say, at the end of 2019 into 2020. Um basically, I was working an overnight stocking job in college. I was uh basically coming in at like three in the morning, leave at like 10, 10, 11 o'clock in the morning. Um it was very mindless work. I started just listening to podcasts, joined Twitter, uh, you know, taught myself some basics about investing, started off really with like uh the Warren Buffett style, doing discount cash flows at my desk, the kind of thing. Uh COVID happened, basically realized, you know, Bitcoin is is the fastest horse here, um, makes a lot of sense relative to other assets, kind of just became obsessed with it. I started posting about it on Twitter, uh, got you know great feedback from the community, uh, ended up, you know, never really intended it to happen as it did, but you know, the account kind of blew up. Um after after about you know six to nine months of of having the account decided to drop out of school, uh, I helped at a uh firm called Blockware basically run um some of their research arm, uh basically at a newsletter podcast, interviewed kind of everybody uh that was that was pretty big in crypto at the time. After about a year, uh decided to basically go off and kind of do my own thing. Uh I launched a crypto research firm called Reflexivity Research with Anthony Pompliano. Uh everybody knows him as Pomp. Uh we ran that for about two and a half years. Uh at some point uh we ended up getting acquired, uh, which ended up being a pretty good outcome uh by by some good people. Um and then after staying on for a year after we got acquired, I ended up leaving and uh wanted to focus more so on on the markets. Um and so I went to an OTC firm uh called Keyrock for a bit, um, and then went to Sticks, which is a secondary's uh token uh uh OTC desk. Uh came on basically as an investment analyst to help look at investments there. I was there for a little shy of a year, and then decided to to kind of go off and and and do my own thing for a bit. Um, and so for now I'm just kind of managing my own personal portfolio, do a lot of a lot of tweeting, uh, you know, try to try to share some of some of my thoughts that are brewing in the brain all day. Uh, but but yeah, here we are.

SPEAKER_00 3:04

That was incredible. And one of those thoughts that was brewing in your brain was this article you posted on August 8th, exploring the outlook for Bitcoin. And I just overlaid it on our Trading View chart, and I think it was like 63.5. You should have put out this article, and the premise was kind of like I don't know, the R looks good for Bitcoin, like the selling is pretty exhausted. Uh, a lot of the worst has largely happened. And I don't know if you like exactly called this today is at the bottom, but R here looks pretty fucking good. And that was August 8th. And obviously we've popped I don't know 20% something along those lines since. Like, yeah, what got you there and how did you like come to that thesis on BTC?

SPEAKER_01 3:56

Yeah, sure. Um, I guess going back to last year, I think the last time that we spoke, um, you know, we we had kind of talked about how you know the the kind of supply-demand imbalance for for crypto assets um, you know, didn't look very favorable, right? You you had a ton of new supply coming on. Um, there weren't a ton of buybacks uh going on at the time outside of outside of hyperliquid. Um so you know, just from a supply-demand standpoint, it didn't really seem you know that favorable for crypto. Um also there was kind of a lack of of general innovation, I would, I would say. Um, you know, kind of fast forward a year later, I would say, you know, that that's starting to kind of shift more more broadly for crypto itself. So now a lot of projects who are generating revenue are you know taking taking revenues, buying back or or in some way distributing that to token holders while at the same time there's a lack of new supply coming online because we haven't seen a ton of new projects launching. So I think the broader crypto view from just a supply demand standpoint is is interesting. But Bitcoin specifically, you know, I think for for this past year, everybody's been been let down by the way that it's performed, including myself. You know, I thought there was a window at the back half of last year where it could have done really well. You had small caps ripping, uh gold, gold did did really well. Um, and and Bitcoin kind of just you know shit the bed when everybody thought that it you know it could have been its its time to shine. Um, you know, but I think I think about a month ago, I was kind of looking around and said, at this point, what what what are the risks and what are the reasons that Bitcoin has underperformed other assets? And you know, I think the the the biggest the biggest two, or you know, the the quantum fears, but then you know the the data concerns specifically with Sailor, um, you know, especially after he he had launched uh STRC. Um, but you know, there came a point where you know Vol had completely died out. It really reminded me of, you know, I've been through one bear market in 2022 uh where you know vol just completely died out. And and you look around at kind of the risks that are on the table and you say, um, you know, where where are we relative to the pricing in of these things that have that have caused us to get down to where we are today? Um, you know, in 2022, that was you know the credit contagion, and then eventually uh uh FTX. I think in in this case, you know, the data quantum concerns, quantum, I think, you know, is is a real concern on a five, 10-year time horizon. Um, but I do think that, you know, significantly off the highs, you know, in gold terms, 70% off the highs, you know, a lot of those concerns have been baked into the price. And the people that were concerned about that, this, you know, is common knowledge now. Um, and so therefore, like if they haven't sold already, what would compel them to sell now uh if if if they weren't concerned about that? And then on the dad side, you know, I think STRC, the the concerns around it really got abated once Saylor showed that he was willing to uh sell some of the Bitcoin to buy back STRC to try to repeg it. You know, there there came a point in time where I put a tweet out, like basically just saying you just got to choose one of the three, uh, you know, the the prefs, the Bitcoin, or or MSTR. Um, you know, you can't just you you have to you have to sell one of them here. Um and he chose to he chose to sell some of the Bitcoin, which um seems like you know, so far to be to be the right choice. Um and and you know, people were still, especially I listened to some like you know, boomer trader guys who aren't very like tapped into tapped into Bitcoin and you know, them talking about how they're still concerned about the data overhang and sailor specifically. When you know, if you were if you were really in the weeds in this, and you know, shout out to people like uh, you know, like Flood, who who uh, you know, his CIO uh Kyle Saska put out like a great write-up on STRC when like not that many people were talking about how you know maybe maybe they would be fine if if they were able to just basically repack it by selling the Bitcoin, which it's four to five X over collateralized by and even more so now that Bitcoin's up. Um so I felt like that was a bit of that was a bit of a mismatch in terms of you know, this has probably already got priced in. People that aren't you know deep in the weeds on Bitcoin are still concerned about this thing, whereas it seems like you know, it's starting the the the concerns could could could kind of be abated in your mind based on the actions that Sailor's taking to remediate the situation. Um, and so yeah, I I definitely, you know, I I wasn't like long calls. Obviously, I wish I was because Vol was so cheap. So, you know, I wasn't expecting like a move like a week after I had put out that that write up, but it was just kind of, you know, everybody's giving up on Bitcoin, everybody in all the the trading group chats that I'm in, everybody I talk to's very negative, you know, everybody that's been in Bitcoin for five plus years, people starting to question the thesis. It's like, okay, you know, maybe this is maybe this is an interesting, you know, asymmetric spot to to to to buy some spot. And I ended up being able to to personally get a pretty sizable allocation and don't have like a super strong short-term view, but I I intend to to hold those spot buys for for a bit.

SPEAKER_00 9:02

Look, I think it's a great thesis, and you you laid it out very clear. And I like I think on the back end of your article, it's very clear to me why the selling would stop or be mostly over. Like why a lot of the worst is sort of already played out. I guess my bigger question for short term, but maybe over the next year or two or multiple, is where is the buying gonna come from? Like, what is it gonna take? Like on-chain seems to have some life. There's Robinhood chain, there's Vlad. Like, there's some things to get excited about. Hyperliquid is doing incredible, maybe it's gonna be legal in the US. Trump's talking about it. But for Bitcoin specifically, it feels like we sort of stop and start at its ability to bring in liquidity, even if it's not as important as prior cycles, that we could argue both ways. It's gotta go up for us to continue. Like, what is that gonna take to get money to flood back into BTC?

SPEAKER_01 9:50

Yeah, I think that's a fantastic question. Um, you know, part of part of thinking through like fair markets usually end, at least for Bitcoin, when you run out of sellers, not necessarily when there's a catalyst for new buyers. Um, and so you know, my kind of thought process on picking up the spot position was we are probably running out of sellers for the major risks that the market's been concerned about for the past year. But then going forward, you know, you ask yourself, a lot of times, you know, the market ends up just describing narratives to the price action and slapping something on and saying, oh, this is why the price is behaving this way, even though you know sometimes it's just supply-demand, more buyers and sellers or sellers right now. Um but I think going forward, what what draws new flows into Bitcoin? It's like great to talk about you know what happened in the past, but but going forward, I think there's a there's a couple things that that make Bitcoin compelling. Um, you know, first of all, I mean the the the broader debt situation in in the US, right? We we're we're kind of cut seemingly coming to a head. Um, and and you know, the market is kind of the forcing function for uh you know uh authorities to to take action, which is basically you know, the the long-end yields. You've got 10, 30 year uh yields breaking out to like multi-decade highs. Uh in the US, also like UK, UK yields, and the rest of the world yields seem seem even worse. Um, but but in the US, you know, you you've got kind of this forcing function of yields picking up for a variety of reasons, running the economy hot, inflation expectations, um, you know, seemingly like no appetite for many politicians uh to cut spending. So, you know, I I think you've got Bitcoin as uh you know kind of a hedge against against those things. And you know, for the first time in a long time, we saw Bitcoin pop on this you know treasury buyback headline from from Scott Besson. But you know, even before that, you know, in the weeks before intervening in in in uh in the yen, and you know, the reason why it seemingly they did that is because you know, if the US didn't didn't toss them uh toss them a line, um, you know, the Bank of Japan may may have needed to sell US treasuries to to defend the currency. Um so you know, I think just in general, the the debt situation for uh for the US. Um the other one would be, which I you see some people talk about starting to get some more noise, especially some of the Zcash people. Um, but you know, I I do think just given a ton of different forces, a lot of which I actually described in uh the write-up I did earlier this year uh that's pinned at the top of my um my account. Um, you know, I think there's a lot of a lot of pressures that will likely continue to exacerbate wealth inequality and uh therefore probably continue to bolster socialist pressures in the US. Although I don't necessarily agree with that as being objective, it seems like that that is more skewed towards you know, probabilistically like continuing uh to accelerate. Um, seems like Mamdani probably is is not is not you know a flash in the pan, at least on like a five, 10-year time horizon. So if if that's true, um, you know, then I think Bitcoin, especially, you know, multi-sig, multi-jurisdictional Bitcoin becomes a really interesting piece of you know, high net worth, ultra high net worth uh portfolios, which I think maybe you've seen some of that, you know, some of the inflows from from these types of entities, but you know, I don't know if we've seen a material flooding in of uh you know holdings from from those types of entities. Um, you know, the other one too is just if you have mandated buying from institutions, I mean you can kind of see in the ETF flows, you know, we had this huge initial run-up, maybe people pledging their Bitcoin into the ETFs, but you know, over the last year they've been the flows have been pretty flat. Yeah. And so I think you know, you could also just argue like, do institutions just say, hey, you know, this is like a generally pretty uncorrelated asset. Um, you know, do we need 1%, 3%, 5%? And if you have any of these huge institutions that basically say, you know, we're priced, because they're relatively price insensitive buyers, takes them a long time to make it make a decision. We're gonna put this in our in our you know, portfolio, pension fund, whatever it may be. Um, you know, though those are the price insensitive, you know, consistent flows that like equities have, uh, which Bitcoin hasn't hasn't really had to date. So that would that that would be uh that would be another one. And I guess to go back to the government thing, and then um I'll I'll pause is um, you know, I think not just the debt situation, you know, I guess I could have added as well, it seems like we are to be more explicit. It seems like we're entering this period of financial repression in the US, uh, where basically, you know, in some form or fashion, they have to peg rates or at least let inflation be higher than what uh what the borrowing costs are for the country. And then when you have the reserve currency, you're basically able to inflate, inflate your way out of the debt. This isn't the first time that this would have ever ever happened. You know, the US did this back in the 30s and 40s, and and so did so did the UK. You know, back back in 1933, um, you know, again, I'm not a macro expert, but you know, just looking at at parallels recently to just get some context on like where we may be in in history and like modern financial history, um, you know, the US basically pegged pegged yields, right? And then inflation was ran hot. And you know, even in in 1933, part of like uh part of the financial repression basically gating off people from being able to move assets outside of the country, um, you know, the US basically, there's an executive order of 6102 where they seized everyone's gold and then they monetized it and marked it up, and then that helped helped uh you know the debt situation for for the federal government basically took took every all the private citizens' gold and then you know mark marked it up and then to to benefit the federal government, you know, in like the UK, they would they were very much limit from my understanding, you know, your ability to um invest in other uh you know financial markets outside of outside of the UK. So, you know, they're the parallels are are very similar. And and when you when you think about it, you know, outside of outside of politicians being willing to cut spending, which you know, I put out this tweet two days ago, like we put the smart one of the smartest guys in the country to in this position to try to do so. And they started firebombing his store and and started saying he was killing people. So like I don't really think that's gonna happen. And the alternative is we have to have some kind of like financial repression.

SPEAKER_00 16:20

And Besson punched him in the face.

SPEAKER_01 16:22

That yeah, Besson also punched him in the face.

SPEAKER_00 16:24

That was yeah, yeah. So I saw you tweet like study 1945 to 1951. That's yeah, yeah.

SPEAKER_01 16:31

This is this is this period like post-World War II where we pretty aggressively ran financial repression. And I I think that we could see a lot of you know, some of the things that I just described, as well as, you know, um, frankly, I think like the case that if I I took a small personal Zcash position just because I think it it could be interesting beta to Bitcoin, but I see Bitcoin as a pure um you know monetary debasement hedge that I want to hold long term alongside alongside gold. Um, but you know, that that would be the angle if if I was somebody who was uh um you know very interested in in that asset specifically, because you know, I I just think that there are going there there's a high likelihood that you could see, you know, maybe maybe not something as extreme as hey, you need to go turn in all your all your gold in Bitcoin and we're gonna seize it. But you know, at least they would look to try to have you know some more control around the you know touch points of moving on to exchanges, things like that. Um, so yeah, I I wouldn't I wouldn't be surprised if we continued to head down the direction of the potential seizure of of hard assets. Like this is like what happened before in history, but before you get to that point, you would likely have some pretty significant appreciation in those hard assets.

SPEAKER_00 17:50

I was gonna bring up Zkash and I was gonna add to your you know sort of communism socialism thing brewing in the US is uh the flock camera story is becoming a big one. I don't know how closely you follow this, but it's made it on stream quite often now that this this is a it's gonna be one of these things where it's like um it's kind of like the data centers like it'd be so easy for a political candidate, it's such a freebie to come out and just fan, you know, take a huge stance, wage war against some uh a topic like this. And it kind of I don't know. I I bought some Zach as well.

SPEAKER_01 18:25

I I still I think you said you bought one-tenth of your Bitcoin stock in very small, just it was basically like a hedge for me to like not be salty if it if it keeps doing well. Like I do think that like the chart against Bitcoin looks quite nice. Like I would never replace my actual Bitcoin spot holdings like that I would want to have long term with with with Zeek. Um, but yeah, I mean, I I think it's I think it's an interesting asset just in terms of like kind of like what you're basically describing as like the cultural zeitgeist, right? Is we have like all of these forces that are continuing to push towards more centralization. That's like what it all comes down to with V Tech, AI, the fly cameras, the data centers. It's all more in just you know, the way our given the moral hazard and all these things after 2008 and and the money printing and the wealth inequality is a byproduct of that, like pretty much almost every major force in society today is leading towards more centralization. And and I and I do frankly think like it's it's a cultural zeitgeist thing, but at some point, you know, that that does, I think, translate to how people think about allocating their capital. So that that's that's a good thing for Bitcoin and crypto.

SPEAKER_00 19:32

Another thread that's pushing is you know, like Dario trying to get open source AI banned in the US. Like there's every thread is sort of pushing towards that centralization. I know you've got to go in a couple minutes, so I'll ask you this last question. Um as we've been trying to understand the map, you know, I've been LARPing as a macro strategist for the last six months, and it's it's difficult. I'm doing my best as it relates to the Bitcoin trade specifically, where you have I saw you tweeting about the yen, and so we're basically back at that at one that that 160 level, and then we've been watching the 30-year yields pretty closely. Like, are there any sort of like lines in the sand or levels with these assets that we should be paying the most attention to as it would rate relate to I don't know, the debasement trade, how Bitcoin will trade, or just general like panic zones for where things can get crazy?

SPEAKER_01 20:16

Yeah, um I I think in general, like you could have these short-term moves, of course, with like the like a lot of stuff in markets. Um, you know, I'm I'm a huge fan and listener of uh forward guidance. Shout out to shout out to to Fijio. If anybody doesn't know, Fijiao was one of our early analysts at Reflexivity, um, and it was a pleasure to to spend some time. Yeah, he's one of our OG analysts as well. Basically, yeah, Fijiou had um Fijal had uh Felix had a like a banger thread on, I believe it was like the energy crisis in Europe in 2022, and it like it was his first post and it instantly got like 10,000 likes. I was like, hey man, you wanna you wanna help like uh part-time with us, like write some articles? And so he came on and he's like one of our cornerstone um and quickly out quickly outgrew us, just even you know, feel like on a crazy trajectory. But uh yeah, man, uh very, very, very proud of that and and having uh been able to work with him for a bit and helping him at all. Um if if I did anything for him. But but uh yeah, huge, huge fan of his his podcast now uh with with Quinn and Tyler uh Neville, who who's now gone. But um, you know, one of the things Tyler would always talk about is basically the the all markets are basically all like this huge volatility game. And now where we are um in in in kind of you know for for policymakers and and we're bumping up on these levels in the 30 year and getting close to levels in in the yen, uh that could be problematic where maybe the BOJ would have to sell treasuries to defend. Like ultimately, a lot of these, I think a lot of these things come down to like just basically volatility, and like Bessin and the powers that be are trying to basically plug all these little spots of volatility and stifle volatility. And so it's like partially about these price levels, which can trigger, you know, people to to to. to you know sell or or buy something aggressively which could you know lead to vol. But you know I I think in general like if you have these these these you know big vol spurts like that that would negatively affect Bitcoin as as with other any other asset and that's partially why I'm just holding spot. But yeah I think I think we're we're we're in this huge volatility suppression game across all assets. Also too because like they this AI build out you know the defending of like the long end is not just for like the US government um you know uh defending its like interest uh expense it's also to I think defend you know this run it hot uh thing that that they're trying to do and like you know accelerated build out of of CapEx etc because you know volatility in in in borrowing costs and also increased borrowing costs could could slow that that build out and cause problems there too. So yeah I I would just say um I would just say be uh be aware that you know if we have if we have these like you know vol events you know something like I don't know the the uh you know Yang carry trade blow up at the end of in you know two summers ago you know comes to mind these these types of things I think I think you know can happen which is just you know why I personally am just advocating for for maybe holding spot hard to say like after this move to like fully allocate but uh but yeah that that's how I'm approaching it it personally I'm willing to just as an individual you know just hold through hold through the vault like I think as an individual um you you you kind of have edge over some of the um you know traditional funds or institutions with LPs because you're able to take very concentrated positions and hold them through volatility like you know so far this year you know actually one of my I I personally hit on the AI trade a little bit but where a lot of my PL came from so far this year was at the beginning of the year I was very long energy like big big big energy stuff before Trump went into Venezuela largely just because the chart looked good if I'm being honest. But like you know like a fund can't nimbly be like okay I'm gonna plow 30 40% into the fund overnight into energy but like as a retail trader you can do that yeah and you can hold through the vault where like institutions have to like manage through it. So you know that that I guess you know for for for and and as a retailer like you're unlikely to just time these moves I'm unlikely to time these short term moves. So you know if you haven't if you haven't got spot entries like I'd be looking to you know try to try to you know accumulate between now and the end of the year maybe on dips not financial advice um but yeah I think I think you kind of just have to like hold through these vol blowups and maybe look at them for like spots to add. But to me I mean the long term the long term picture seems clearer than ever but you know nothing really changed. We were just kind of waiting on this forcing function of the market pushing up yields to the point where where you know the the authorities at the app had to act so yeah super super interesting times man.

SPEAKER_00 25:00

It is um well commented I know you gotta go incredible uh thesis you you laid out it's traded well so far hopefully we could do part three at uh 127k BTC and yeah I mean I I I I love the outlook I always appreciate you coming on thank you sir I uh appreciate the time and uh hopefully we get to get you know like you said hopefully we get to uh chatting brother all right man have a good one thanks for the time peace you know I I um really smart guy I as we do these streams I I realize like yeah we're just we're pretty on it like I I don't know what to tell you like we're pretty fucking on it you know I agree with him I think I basically agree with him. I think we look good. I I I think we're we're we're fucking we're just on it, you know? I don't know what to tell you.